A PESTEL analysis is a framework or tool used by marketers to analyze and monitor the macro-environmental (external marketing environment) factors that have an impact on an organization, company, or industry. It examines the Political, Economic, Social, Technological, Environmental, and Legal factors in the external environment. A PESTEL analysis is used to identify threats and weaknesses which are used in a SWOT analysis.
Political factors include government policies, leadership, and change; foreign trade policies; internal political issues and trends; tax policy; regulation and de-regulation trends.
Economic factors include current and projected economic growth; inflation and interest rates; job growth and unemployment; labor costs; impact of globalization; disposable income of consumers and businesses; likely changes in the economic environment.
Social factors include demographics (age, gender, race, family size); consumer attitudes, opinions, and buying patterns; population growth rate and employment patterns; socio-cultural changes; ethnic and religious trends; living standards.
Technological factors affect marketing in (1) new ways of producing goods and services; (2) new ways of distributing goods and services; (3) new ways of communicating with target markets.
Environmental factors are important due to the increasing scarcity of raw materials; pollution targets; doing business as an ethical and sustainable company; carbon footprint targets.
Legal factors include health and safety; equal opportunities; advertising standards; consumer rights and laws; product labeling and product safety.
